Walt Disney Co Could Get a Real Boost from Nokia VR Partnership

Walt Disney Co was recently in the news for signing a partnership with Nokia Corp that could put both companies in the forefront of the burgeoning virtual reality market.

Nokia projects that the virtual reality market will be worth up to $10 billion by 2020, and with their first-to-market 360-degree camera, the company has certainly impressed many, including new partner Disney. An exciting partnership between this two companies could be beneficial to both their stocks.

The Disney/Nokia deal

Disney has signed a deal to use Nokia’s OZO cameras to shoot 360-degree videos that will be used to shoot marketing materials and behind-the-scenes extras for blockbuster movies. Even before they signed the deal, Disney had used Nokia OZO cameras to film video extras for the blockbuster movie The Jungle Book.

Nokia President Ramzi Haidamus made it known that the partnership with Disney was just the beginning. Haidamus even suggested that the deal covers other Disney studios like Marvel and Lucasfilm, making it likely that Nokia cameras will be used on some of the biggest blockbuster movies ever.

Disney already using OZO cameras for projects

Currently, OZO cameras are being used to shoot behind-the-scenes video of an upcoming Disney movie, Haidamus, however, remained tight-lipped when asked which movie it was.

Nokia and Disney produced two VR shorts to promote The Jungle Book, with OZO cameras being used on a 360 degree cast interview that has been viewed more than one million times, and also on the live red carpet premiere for the movie.

Users will, of course, still need a compatible headset in order to get the best experience with the content created by Disney and Nokia. There are already many headsets on the market including the Oculus Rift from Facebook Inc and Alphabet Inc’s Google Cardboard.

The deal between Nokia and Disney was a surprise to some, as Disney does have an equity stake in rival Jaunt. However, virtual reality startup Jaunt is not only partially owned by Disney, but is also a partner to Nokia, so the deal makes sense. Disney was in fact the lead investor in Jaunt’s last funding round, which raised $65 million.

The Nokia OZO camera was among the first 360 degree virtual reality cameras to hit the market. Nokia debuted the camera in November with a stated target market of Hollywood filmmakers. The OZO was highlighted by Nokia as a camera to be used by filmmakers, television reporters and music video directors. It sells for $60,000 and Nokia has plans to eventually rent them out for projects.

Aside from Disney, other studios like Twenty First Century Fox Inc have expressed interest to Nokia. Nokia is also working with NASA and several sports leagues as early discussions are currently going on with the National Basketball Association to livestream games in 360 degrees. This obviously represents a huge market if virtual reality hits the mainstream population, as many believe it will.

Nokia by the Numbers

Nokia’s announced full-year earnings in February saw the company’s net sales grow to 12.5 billion Euros. The company still gets the largest percentage of its revenue from the Nokia Networks segment, which witnessed sales grow 3% last year. The company’s Nokia Technologies segment, which includes the virtual reality efforts, however, represents the highest upside.

Nokia Technologies experienced an upswing in revenue by 170% in the fourth quarter and it was up 77% for the full fiscal year. Operating profits for the Nokia Technologies segment went up by 102% for the full year, and it saw sales pass 1 billion Euros for the full year. The operating profit for the segment was 720 million Euros, which is a much better margin than the Nokia Networks segment.

Disney exploring opportunities

Disney has continued to branch out into new segments in order to further diversify its business. It now has solid partnerships with Jaunt and Nokia, also, DIS stock has had stellar returns led by its movie, television and theme parks segments.

Disney continues to look towards the future and sees the power and potential of adding virtual reality to its existing and upcoming brands.

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